A
second home or condo has been called the ultimate
discretionary purchase -- something that many people
would like to have but no one needs. People who do
own a place at the beach, the lake or in the mountains
often are quick to express frustration at not being
able to spend more time there. It hardly makes sense
to have the expense of a mortgage, upkeep, insurance
and taxes for a place you don't use more than a couple
of weeks a year.

What
is a Fractional Ownership?
Do you like the idea of owning a vacation condo, but
don’t want the burden and cost of repairs and
upkeep? Do you love the services of a luxury hotel
but dislike living out of your suitcase? You’re
not alone. A new breed of vacation condo ownership,
called "fractional ownership," is becoming
increasingly popular with busy professionals looking
to maximize their family vacation time.

Owners purchase a deeded share in a condo (usually
1/4 to 1/13) that gives them a certain number of weeks
per year at the property and use of all amenities.
By only paying for the time you use, fractional ownership
can be a much more cost-effective way to own your
vacation condo.

Fractional ownership offers individuals
the opportunity to buy partial ownership of a really
nice place in a resort area. We're talking chalets
with walk-out skiing in the Rockies, oceanfront houses
or condos, or island properties in the Caribbean and
Europe, often with resort-style amenities including
on-site restaurants, fitness clubs, golf courses and
a concierge service.

Fractional, But Not
Timeshare
If it sounds a lot like a time share, that's because
there are similarities. The more fractions that are
sold, the more it resembles a time share. Both can
be bought as deeded properties (some time shares are
now sold as club memberships instead of time in a
specific unit), and can be rented out, shared with
family and friends, sold or left to someone in a will.

Fractionals differ greatly from the
old-style timeshares. The primary differences are
that fractionals offer:
. deeded property, with the same rights as any other
real estate purchase
. greater chance of property appreciation
. a longer amount of time on property (from 4-13 weeks)
. a luxury level of furnishings, services and amenities

Like time shares or any kind of resort property, there
are small players and big guns in the business. If
you're in love with one locale and could see yourself
going back to the same place over and over, a small
company could be just the ticket. If you'd like more
flexibility, some major corporations such as Ritz-Carlton,
the Four Seasons, Disney and Marriott also are in
the business. All of them have resorts in various
parts of the country, and even in the Caribbean and
Europe, with the opportunity to swap time at other
destinations.

Of course, all of the above perks add up to another
major difference: price. The cost of fractional property
is quite a bit higher than that of a typical timeshare,
though still much less expensive than whole ownership
of a condo in the same location.

Exchange Weeks & Travel the World
Trading weeks is a great concept from the timeshare
days that hasn’t been abandoned but instead
greatly improved upon. With four or more weeks to
enjoy, owners can choose to spend part of their time
at a different property in another part of the country
— or the world.

Most fractional properties participate in an exchange
program that gives owners the ability to reserve time
with other properties that have a similar level of
luxury and service.

Service Sets Fractionals Apart
Personal service is an area where fractional properties
clearly outshine traditional condo ownership. When
it comes right down to it, for most people today time
is their most valuable commodity. Who wants to waste
it cleaning, unpacking, grocery shopping and mowing
the lawn?

There are a couple of drawbacks to not owning the
whole condo, of course. If you have a passion for
interior decorating or enjoy taking unplanned, last-minute
vacations, you may be unhappy with the limits of fractional
ownership. However, fractional properties are one
of the fastest-growing segments of the real estate
industry, so there are clearly many who find the benefits
far outweigh the drawbacks.